China’s total crude steel output fell significantly during the first seven months of this year, down 6.4% on year to 609.3 million tonnes, according to the latest data released by the country’s National Bureau of Statistics on August 15.
During July alone, China produced 81.4 million tonnes of crude steel, also down 6.4% on year, with daily output averaging 2.63 million tonnes, lower by a large 397,500 t/d or 13.1% from that for June, Mysteel Global calculated based on the NBS data.
The significant on-month fall in July mainly reflected the fact that more integrated steel producers started to cut output last month, while most electric-arc-furnace mills also kept their production low, given the losses they were suffering, Mysteel Global learned.
Mysteel’s survey among the 247 blast-furnace mills across China under its tracking showed that their capacity utilization rate had slipped for the sixth successive week over July 22-28, down by another 2.1 percentage points on week to a five-month low of 79.3%. In parallel, that among the surveyed 85 EAF mills registered 37.6%, still staying at a low level despite the on-month recovery of 2.01 percentage points.
With the continuous decrease in mills’ output, the negative sentiment in the domestic steel market eased to some extent in the second half of July, lending some support to finished steel prices, Mysteel Global noted.
As of July 29, the national price of HRB400E 20mm dia rebar, a bellwether of the domestic steel-market sentiment, was assessed by Mysteel at Yuan 4,187/tonne ($619/t) including the 13% VAT, gaining Yuan 223/t from the recent low on July 15, though still Yuan 200/t lower compared with the end of June.
However, demand from end-users remained lackluster in July, as the high temperatures in many regions of China impacted the normal outdoor work on construction sites.
For example, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese traders under Mysteel’s regular survey averaged 154,190 t/d in July, down 1,770 t/d from the average for June, as reported.
Last month, Chinese finished steel output registered 106.2 million tonnes, down 5.2% on year, taking the country’s total production for the first seven months of this year to 776.5 million tonnes, lower by 4.6% from the same period last year, according to the NBS data.
Written by Nancy Zheng, zhengmm@mysteel.com
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint. 
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